9 months ago
NCLAT Overturns Insolvency Order Against Mahagun, Orders Fresh NCLT Hearing
Imagine a company built a few apartment buildings, like Mahagun.
One company, IDBI Trusteeship, said Mahagun owed them a lot of money for special company loans, about Rs 256 crore.
A court called NCLT agreed and said Mahagun was in big trouble, called insolvency, and stopped Mahagun's managers.
But Mahagun went to a higher court, the NCLAT, and said the NCLT made a mistake.
The NCLAT agreed, saying that when a company is in trouble, it should be about specific building projects, not the whole company.
They also said the NCLT didn't look at new information, like a report saying things were better.
So, the NCLAT canceled the 'big trouble' order and told the NCLT to look at the case again with all the new information.
Other people, like those who bought apartments and a company called Aditya Birla Capital that lent money, also got a chance to present their side.
The NCLAT has overturned an insolvency order against realty firm Mahagun, directing a fresh hearing at the NCLT.
The NCLAT cited Supreme Court directions that real-estate insolvency should be project-specific, not company-wide.
A fresh status report filed by Mahagun and intervention applications from homebuyers were ordered to be considered by the NCLT.
Aditya Birla Capital, a financial creditor to four Mahagun projects, also had its intervention application ordered for fresh consideration.
The original NCLT order on August 5, 2025, had allowed the insolvency plea filed by IDBI Trusteeship Services Ltd over a Rs 256.48 crore default.
- Who
- National Company Law Appellate Tribunal (NCLAT), National Company Law Tribunal (NCLT), Mahagun, IDBI Trusteeship Services Ltd, Aditya Birla Capital Ltd, homebuyers
- What
- The NCLAT set aside an insolvency order against realty firm Mahagun and directed the NCLT to hear the petition afresh.
- Where
- Delhi-based bench of the NCLT
- When
- The NCLT allowed the insolvency plea on August 5, 2025. The NCLAT ruling was passed on Thursday, November 4, 2025.
- Why
- The NCLAT found that the NCLT should have considered Supreme Court directions regarding project-specific insolvency and a fresh status report filed by Mahagun.
Key facts
- Original NCLT Order Date
- August 5, 2025
- Insolvency Claim Amount
- Rs 256.48 crore
- Default on Debentures
- September 30, 2023
- IDBI Trusteeship Recall Notice
- February 20, 2024, and April 17, 2024
- NCLAT Ruling Date
- Thursday (November 7, 2025 publication)
- NCLAT Ruling Length
- 39 pages
Quotes
NCLAT
National Company Law Appellate Tribunal
“Both parties are given liberty to place this order before the Adjudicating Authority (NCLT) and request for fixing a date in the Section 7 petition, after two weeks, for hearing and consideration. No further opportunity be granted to the CD to file a reply.”
thehindubusinessline.com
“Order, dated August 5, 2025, is set aside and petition IB112(ND)/2025 revived before the Adjudicating Authority for fresh consideration.”
thehindubusinessline.com
